NYCHA Admits to Misleading HUD. Will Pay $1.2 Billion In Next 5 Years to Fix Conditions In Affordable Housing

The U.S. Department of Housing and Urban Development (HUD)  reached an agreement with New York City to fix hazardous conditions in buildings under the control of the New York City Housing Authority (NYCHA).  The federal complaint which you can read here and filed on January 11, 2018 alleges that NYCHA violated basic health and safety regulations that protect children from lead based paint.  NYCHA also failed to provide safe and sanitary housing.  HUD and NYC have reached a settlement in the matter which a consent decree was filed.  The decree can be read in its entirety here orders NYC to provide $1.2 billion in additional capital funding over the next five years and $200 million every year thereafter until the problems are fixed.  A federal monitor will be set up in order for NYCHA to meet their goals under the decree.

According to the consent decree NYCHA's certifications to HUD contained untrue representations that they were complying with HUD’s federal lead paint safety regulations.  The complaint also alleges that NYCHA disguised the conditions of the properties in order to receive billions in federal funding.  Also of note are the following admissions:

• NYCHA’s data admits that there were more than 260,000 work orders for roaches between 2013 and 2016.  Between the same period there were 90,000 mouse work orders and 36,000 rat work orders.
• In more than half of NYCHA’s developments, NYCHA’s inspections, including statistical sampling, have confirmed the presence of lead paint somewhere on the premises, and in at least 92 developments, the inspections, including statistical sampling, have confirmed the presence of lead paint inside apartment units.
• Since at least 2010, NYCHA has not performed most of the biennial lead paint risk assessment reevaluations required by regulation for developments containing lead paint.
• Currently, after NYCHA has removed mold from apartments, the mold returns at least 30% of the time.
• In the winter 2017-2018, more than 320,000 residents or 80% of the public housing population lost heat.

The consent decree will allow NYCHA  resume spending from its existing public housing capital funding without seeking prior HUD approval.  HUD maintained an existing zero threshold for NYCHA which prevented them from using funds.  In a press conference today Mayor deBlasio requested that the state legislature release $550 million dollars that have been held for NYCHA since 2011.  He also requested from Governor Cuomo design-build authority which would allow the City to award a single contract for engineering and construction.

Ben Carson, HUD Secretary stated “This historic agreement marks a new era for New York City’s public housing, one that puts families and their children first. New York City and New York State are making an unprecedented commitment to put NYCHA on a new path. The cooperation of federal, state and city officials will vastly improve the living conditions for hundreds of thousands of New Yorkers who call NYCHA home.”

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/nycha-admits-to-misleading-hud-will-pay-1-2-billion-in-next-5-years-to-fix-conditions-in-affordable-housing/

Market Survey Shows That New York City Construction Costs Remain The Highest Worldwide

Turner & Townsend, a multi-national company famous for their project management and program management consultancy work released their annual International Construction Market Survey.  According to the company,  the survey collects information from 46 international markets to determine to global state and direction of the market.  The survey indicates that New York City leads the world in construction costs for the second year in a row in the Turner & Townsend survey.
The five most expensive locations are New York City, San Francisco, Hong Kong, Zurich, and London. The survey looked at 6 different types of buildings in order to assess total building costs. 

The buildings that were taken into consideration were the following:

High-rise apartments
Office block prestige (Commercial office space)
Large warehouse distribution centers
General hospitals
Primary and secondary schools
Shopping centers including malls

Overall construction costs in New York City decreased 12 percent in 2017 and expenditures were measured at $45.3 billion.  This is the second highest on record after 2016. They are forecasting expenditures to hit $52.5 billion in 2018 citing recent tax cuts as an incentive for driving businesses back to the United State and specifically New York City.

Future developments will revolve around government fund and non-residential construction.  "Non-residential and government-funded construction will drive much of the growth in 2018 and 2019. Government expenditure is expected to reach USD16bn, with half spent in New York City.  New York is currently experiencing massive redevelopment.  The biggest project is the USD20bn Hudson Yards, which includes 18 million sq ft of commercial and residential space. The Long Island Express, a USD10bn transport project, includes a station under Grand Central. Meanwhile, La Guardia airport is adding a new USD8bn terminal. Employment in construction is at record levels with skilled trades in short supply."  The report indicates that the overall forecast looks bright driven by positive economic growth.  Construction costs will remain high as there is a shortage of skilled labor in NYC. 
The outlook nationwide looks rosy as well as construction costs hit an all-time high of $1.3 trillion last year.  Skills shortage and material costs continue to plague the industry.
On the salary side, New York City was second behind Zurich Switzerland where the average wage was $98.30 per hour in comparison to Zurich's $104 per hour.  The report did indicate that only high union wages were taken into consideration and did not include private sector rates.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/market-survey-shows-that-new-york-city-construction-costs-remain-the-highest-worldwide/

Landlord Responsibilities and Expectations for Lawn Maintenance

The summer months are ahead of us and now is the time that nature is really taking a toll on our lawns.  Most property management companies and property owners take the duty of maintaining their lawns seriously.  Having a presentable lawn brings substantial value to your property.  Some landlords also shift the responsibility to their tenants but most of the time it doesn't benefit the parties involved.  Since this is mostly the case, here is our suggestions in maintaining your lawns during the summer month.

Why tenants should not be responsible for lawn care
Sometimes owners and property management companies decide that it would be advantageous to have their tenants upkeep the lawns of their properties.   The customary agreement would be the landlord would reduce the amount of the rent by having the tenant take care of the lawn.  The reason some landlords decide to this is the time involved.  If you are a landlord with multiple properties it is time consuming to schedule with your tenant and having the work done.  Whether it be performed by yourself or using a lawn maintenance company there is a benefit, in theory in shifting the resources towards the tenant.
The problem in this situation is tenants sometimes neglect their responsibilities or do not perform the job that is expected.  Landlords should always have in writing what the expectations of lawn maintenance is for the tenants.  This is normally done as an addendum to the lease.  Whether it be just mowing the grass or the additional effort of removing tree limbs, weeds and using pesticides all of these issues should be addressed in an agreement.  The failure to do so will result in you having to do the work yourself or hiring someone, costing you additional monies.  Plus the added confrontation with the tenant is not beneficial to anyone involved.

Landlords responsible for lawn care
Without an agreement otherwise, the landlord or property management company is normally responsible for the maintenance of the property's lawn.  Although it may increase the cost to the tenant, the benefits to the owner far outweigh the added rent.

By taking on the responsibility of the lawn care, the landlord is in total control of the look and expectations surrounding the exterior.  In most instances, landlords in this situation find it advantageous to hire a professional lawn care provider.  By doing so, you now have the advice of professionals who understand what is needed as having their expertise and tools to handle any issue that might arise. The added benefit of fertilizing and reseeding when necessary is another great benefit of using a professional outfit.  Partnering with a company will certainly save a landlord time and in some instances money.  This is especially true if you have multiple real estate investments in New York City.

What is the right fit for you?
At the end of the day it does come to how comfortable you are with your tenants and the level of service you will receive.  In our experience, it advantageous to use experienced professionals to do the job.  No one wants to inspect their property and see dead dried out grass or overgrown weeds.   If you decide not to, remember always have it in writing what you are expecting!

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/landlord-responsibilities-and-expectations-for-lawn-maintenance/

Pending Home Sales Drop In April Amid The Ongoing Housing Shortage

The National Association of Realtors (NAR) is reporting that pending home sales for April decreased for the first time in three months.  NAR used a Pending home sales index which saw their reading drop to 106.4 for April.  The drop was 1.3% from March which saw the index level at 107.8.  Pending home sales have been adversely affected the the shortage of available housing available as the levels of housing is considered "dire" at this point.

Pending Home Sales Index is an indicator based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing according to NAR.
Lawrence Yun, chief economist doesn't see a change in sight unless more new and existing home sales hit the market.  The market is being affected by higher mortgage rates, increase home sales prices  and increased gas prices will affect the market ahead.  He states

“Pending sales slipped in April and continued to stay within the same narrow range with little signs of breaking out. Feedback from Realtors, as well as the underlying sales data, reveal that the demand for buying a home is very robust. Listings are typically going under contract in under a month, and instances of multiple offers are increasingly common and pushing prices higher. The unfortunate reality for many home shoppers is that reaching the market will remain challenging if supply stays at these dire levels.”

“The combination of paying extra at the pump, while also needing to save more for a down payment because of higher rates and home prices, may weigh on the psyche of those looking to buy.  For now, the economy is very healthy, job growth is holding steady and wages are slowly rising. However, it all comes down to overall supply. If more new and existing homes are listed for sale, it would allow home prices to moderate enough to stave off inflationary pressures and higher rates.”

It should be noted that although the inventory shortage, Yun still predicts an increase of existing home sales of .5 percent to 5.54 million.  Also of note in our region, the index indicates no change in the pending home sales index as it remained at 90.6.  This is 2.1 percent the same period last year.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/pending-home-sales-drop-in-april-amid-the-ongoing-housing-shortage/